Joshua Blank and his co-founding partners created OpenSesame after 10 years in the e-learning business, working with learners, professional associations and companies that connect their employees to learning and development programs. They discovered that one of the largest roadblocks preventing the growth of e-learning was the lack of high-quality courses. They considered different ways to connect buyers and sellers, and decided to apply the iTunes model to create OpenSesame—an elearning marketplace. How is it going? Find out in this in-depth look at the rapid-growth e-learning company—and if it’s any hint—they just secured $2 million in funding, announced at TechCrunch Disrupt in San Francisco.

Victor: What does the name mean?

Josh: We’re OpenSesame because it’s our mission to unlock elearning. Our mission is to make it as simple as possible to buy an elearning course and have it work with any Learning Management System. In addition, we are open in the sense that anyone can place courses in the marketplace for sale and they will work with any LMS. There is no requirement to buy from a certain seller and there is no requirement to buy large bundles when all you want is a single course.

Our marketplace connects elearning buyers and sellers in a transparent platform where buyers find the courses they need to meet their professional development goals and sellers find new customers.

Victor: What is it? Who created it?

Josh: OpenSesame (www.OpenSesame.com) is an online marketplace that makes purchasing an elearning course as easy as downloading a song from iTunes. U.S. companies spend more than $120 billion annually on employee learning and development, and spend more than $30 billion a year specifically on elearning products. Despite this huge market size, the elearning industry is fragmented into thousands of players competing in different sectors, without a centralized marketplace. OpenSesame applies the successful e-commerce model to a fragmented marketplace in need of consolidation.

OpenSesame has three co-founders: Don Spear (CEO/CFO), myself—Josh Blank (Senior VP and General Manager) and Tom Turnbull (Vice President Business & Community Development). Don has a 25 year history of leading businesses from inception to success. He co-founded BlueTech LLC in 2000 to improve productivity in the skilled trades through elearning solutions. BlueTech’s primary product is BlueVolt, a learning management system targeted towards manufacturers and trade associations in the skilled trades, such as electricians. Prior to founding BlueTech, Spear was Co-Founder and President of Banfield, The Pet Hospital (the successful chain of veterinary hospitals co-located with Petsmart locations) and Senior Vice President of Strategy and Logistics at Petsmart (the national chain of pet stores).

I began my career as a software developer and I have managed several product and engineering teams. As Co-founder of BlueTech, I created the architectural vision for and oversaw development of the company’s web-based Learning Management System. I also co-founded PopArt, an Internet services agency and Eleven Wireless, a broadband network management system focused on the hospitality market.

Tom has worked in business development, product, and legal roles at several Internet companies, including Internet Brands (NASDAQ: INET), SplashCast Media, and the Los Angeles Times. Additionally, Tom headed up new business development for Knowledge Learning Corporation, the largest privately-held for-profit education company. Tom was also an associate attorney with Williams Kastner and a consulting manager with Arthur Andersen.

Victor: What does it do? What are the benefits?

Josh: For the first time, OpenSesame allows buyers to research, evaluate and purchase courses from a diverse set of publishers in a single location. OpenSesame is also a solution for elearning Sellers, who can use our marketplace to reach new buyers without investing in additional sales staff. Sellers can sell existing off-the-shelf courses, thereby leveraging work they have already completed, or create new courses specifically for the OpenSesame marketplace.

In addition to functioning as an ecommerce platform for elearning courses, OpenSesame is also a technology platform that connects SCORM or AICC compliant elearning courses to any LMS. We solve the interoperability hurdle that makes elearning complicated, difficult and time-consuming to implement.

We created OpenSesame because the inefficient elearning market is a problem for both buyers and sellers and hinders the development of the elearning sector. Our marketplace will benefit all players in the elearning community as we connect buyers and sellers and enable the growth of elearning for professional development.

Victor: How is it unique from other similar products/services? What companies do you see as in the same market?

Josh: Traditional publishers typically seek to be the sole source of off-the-shelf content for their customers. Their average sale involves a multi-year commitment for entire libraries of content that are not all relevant to the buyer. Restrictive long-term contracts create an opportunity for us to build our marketplace by offering buyers the ability to buy what they want, when they want it, in whatever quantity they want.

In addition to our flexible pricing and purchasing models, we offer a wider range of fresher elearning content and allow buyers to mix and match purchases from different vendors. Finally, the process of implementing an OpenSesame course takes minutes versus weeks for other solutions.

Victor: When was it developed? What is something interesting or relevant about its development history?

Josh: OpenSesame was founded in early 2010 by a group of experienced elearning and technology leaders. We’re a start-up, in every sense of the word! We have a dynamic development team adding new features every day and a community team working with buyers and sellers to connect them in our marketplace.

Victor: Where did it originate? Where can you get it now?

Josh: The OpenSesame team is based in beautiful Portland, Oregon, where we enjoy great food, great people and access to outdoor and indoor adventures. Our marketplace is accessible worldwide, and thanks to a worldwide network of CDNs, we assure our customers that they’ll get fast and efficient service no matter where they are located.

Victor: How much does it cost? What are the options?

Josh: OpenSesame is built on a revenue sharing model. E-learning developers upload their courses to the OpenSesame marketplace at no cost to them, and set the purchase price for each course. Buyers visit the OpenSesame marketplace to shop for courses at a variety of price levels, depending on the course’s length, objectives, features and resources. When the courses are sold, OpenSesame collects 30% of the income from each transaction and distributes the remaining 70% to the course seller.

Victor: What are some examples of it in action?

Josh: Visit www.OpenSesame.com to see our marketplace in action. We have hundreds of courses available for sale in our marketplace today, and we plan to accumulate the world’s largest catalog of elearning courses by the end of the year. You can visit our site today to read user profiles, see course descriptions, previews and reviews and read our blog to see our thoughts on the future of elearning.

Victor: Who is it particularly tailored for? Who is it NOT for?

Josh: OpenSesame is for everyone in the elearning community. Our marketplace facilitates connections between the buyers and sellers of elearning, and we welcome anyone who wishes to participate. We do not discriminate among sellers, topics, authoring tools or learning management systems.

Victor: What are your thoughts on education these days?

Josh: Access to high quality, fresh, and timely elearning courses is a major friction point toward industry growth and penetration into more companies who value employee education. Our hope is to help reduce that friction by making it fast and easy to buy elearning courses.

Victor: How does OpenSesame address some of your concerns about education?

Josh: OpenSesame will drive innovation in the elearning market by enabling buyers and sellers to evaluate the offerings of other players in the marketplace. As customers make informed buying decisions, we’ll empower the best, most effective courses and learning approaches to rise to the top. Competition will drive quality which will be a huge benefit to end users taking training.

Victor: What is your outlook on the future of education?

Josh: Creative people and organizations in the e-learning field are making tremendous advances in engaging and empowering learners to accomplish really effective learning transfer. We think that the next game-changers will be tools that:

Connect people in the developing world to elementary, middle, high school, college and advanced degrees;

Enable motivated individuals to pursue professional development;

Improve elearning delivery models so that information is at learners’ fingertips, easy to find and easy to share; and

Improve social learning networks to provide distance learners with the discussion, conversation and support needed to ensure effective learning transfer.

Victor: What else can you tell educators and other leaders in and around education about the value of OpenSesame?

Josh: We’re here to connect. We’re interested in hearing from the buyers and sellers of elearning on how we can build better connections to facilitate the growth of elearning.

Our ultimate goal is to make learning and professional development universally accessible for anyone with personal ambition.

Victor: Describe your organizational culture.

Josh: OpenSesame is proud of our approach to the workday, where we have a Wii in our conference room and a universal devotion to Chipotle burritos. Come the holidays, no stuffy cocktail party for us. We’ll take a Rockband festival and a chocolate fountain. Children and dogs invited.

Our product development team follows Agile practices, which mean that we are flexible, open to discussion and attentive to employee ideas and customers’ needs. We also enjoy our open office space, where it’s easy to ask questions and involve our full team in collaboratively building new features or planning next steps.

Victor: Talk about your potential technology partners.

Josh: OpenSesame is building technology partnerships with both content authoring tool and learning management system vendors. These relationships will become sources of referrals and word-of-mouth support within the industry. OpenSesame allows partners to add more value to their products with its read-write API. API integration makes the OpenSesame content catalog directly available within partner learning management systems (i.e., the content purchaser will buy content directly through their LMS without having to visit the OpenSesame.com website). OpenSesame has already entered into these discussions with seven LMS providers, including eCampus, Litmos, BlueVolt, SCORM Cloud, Omnibus LMS, SAKAI and SumTotal.

We are creating partnerships with industry-leading LMSs and content authoring tools. Our read-write API allows buyers to seamlessly purchase content directly in their LMS and sellers to publish courses to our marketplace directly from their authoring software. These partnerships help us to strengthen our position as themarketplace that companies will rely on to buy and sell elearning courses.

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Victor Rivero tells the story of 21st-century education transformation. He is the editor-in-chief of EdTech Digest, a magazine about education transformed through technology. He has written white papers, articles and features for schools, nonprofits and companies in the education marketplace. Write to: victor@VictorRivero.com